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Streamline Returns Processing to Improve Customer Satisfaction

Returns are an unavoidable part of your business. Customer satisfaction and the success of your warehouse often hinge on an easy returns process for both parties. Learn how to streamline your returns operations, turning this challenge into your competitive advantage.

by Darren Jorgenson

With the explosive growth of e-Commerce, returns have become an unavoidable aspect of your operations. In fact, recent studies show that in 2023, returns from online purchases saw an average of 30% across retail sectors, some reaching as high as 56%, placing immense pressure on fulfillment operations.1 For businesses, managing returns efficiently is not only about minimizing costs but also about preserving customer satisfaction and loyalty. Roughly 10% of all returned goods in the U.S. end up in landfills, amounting to 5 billion pounds of waste annually.2 This environmental toll underscores the need for retailers to adopt more sustainable return practices.

In this FORTNA blog, we’ll explore key strategies to streamline returns processes, improve reverse logistics, and leverage technology to turn returns from a headache into your competitive advantage.

The returns challenge

Returns can be both a logistical and financial burden. Whether due to incorrect shipments, damaged goods or customer buying habits, handling returns requires a strategic approach to mitigate costs while maintaining customer loyalty. A significant 79% of customers expect free return shipping, and 58% desire a hassle-free return process, reflecting the critical role returns play in satisfying your customer’s expectations.2

Streamlining the returns process

The first step to managing returns is developing a streamlined process that is easy for both you and your customer. Providing clear guidelines will reduce confusion and help customers understand and follow the process. This includes timelines for returns, condition requirements, and any associated fees. Implementing a return merchandise authorization (RMA) system allows customers to initiate returns online, providing your warehouse team with crucial details ahead of time, such as the reasons for return, product type and condition. Pre-printed or downloadable return labels make it convenient for customers to send back items while allowing the warehouse team to quickly identify and process the return.

Optimizing reverse logistics

Once returns arrive at the fulfillment center, efficient reverse logistics plays a critical role in minimizing costs and maximizing recoverable value from returned goods. Designate return zones or specific areas for processing returns to avoid congestion and confusion. Many organizations with a high volume of returns have even built new facilities primarily used for returns. Others have sourced a 3PL to manage the entire process. These options allow workers to handle returned products efficiently without affecting outbound operations. Using automated systems to scan barcodes, inspect the condition of the product, and direct items to their next step (restock, refurbish or dispose) speeds up the entire process.

Refurbishment and restocking strategy

Returned items are not all the same, and each should be handled according to its condition. A well-structured refurbishment and restocking strategy can optimize profitability. As soon as products are received, they should be categorized. For example:

  • Restockable items that are unopened and in perfect condition can be sent back to inventory quickly.
  • Refurbishable items might require minor repairs or reconditioning before they can be resold.
  • Non-restockable items may need to be disposed of or sold through secondary markets.

Advanced software, automation and technology

Returns are a burden for both transportation and distribution. Within the four walls, advanced software solutions and automation can significantly streamline the returns process. A warehouse execution system (WES) can track the entire returns lifecycle, from when it arrives at the warehouse to when it is restocked or sent for refurbishment. It can also help allocate resources efficiently by prioritizing high-value returns.

Automation and robotics can be deployed to handle repetitive tasks such as sorting, packaging or even refurbishing. Seamless integration of returned goods into your live inventory allows for better resource balancing. It can help reduce overordering by considering the returns that are ready for resale while also preventing stock shortages.

An AutoStore solution can help you manage your returns process. As a premiere global AutoStore system integrator, FORTNA has worked with retailers that have seen rates of returns as high as 40%, which makes automating some of the returns process a must. By taking advantage of the AutoStore system, once a product has been deemed fit to be restocked, it can be easily added to inventory and used to fill new orders.

Sustainability in returns management

Returns can contribute significantly to waste, especially in industries like fashion or electronics. Embracing sustainable return practices can benefit both the environment and the bottom line. Establish partnerships with recycling companies to properly dispose of non-reusable goods. Implementing responsible disposal practices reduces environmental impact and keeps you in compliance with regulations. Encourage sustainable practices by offering customers incentives for choosing alternative return options like donating products or using eco-friendly packaging when sending returns.

FORTNA Can Help

Managing returns effectively is a vital part of running a successful distribution and fulfillment operation. The FORTNA team of experts can help you design a returns system and process to streamline returns in your facility, turning returns into your competitive advantage.

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<sup>1</sup> <a href="https://retailboss.co/state-of-ecommerce-returns/">https://retailboss.co/state-of-ecommerce-returns/” rel=”noopener” target=”_blank”>https://retailboss.co/state-of-ecommerce-returns/”>https://retailboss.co/state-of-ecommerce-returns/</a><br /> <sup>2</sup> <a href="https://gitnux.org/ecommerce-return-statistics/" target="_blank" rel="noopener">https://gitnux.org/ecommerce-return-statistics/</a>

About the author

photo-of-darren-jorgenson-practice-lead-strategy

Darren Jorgenson

Practice Lead, Global Strategy

Darren Jorgenson is the Global Strategy Practice Leader for FORTNA and has been in the industry for 20+ years, serving in multiple industries and consulting roles. Darren is a member of the Council of Supply Chain Management Professionals and has been recognized as a Pro to Know by Supply & Demand Chain Executive magazine.